California’s Valentine’s Day Gift to Employers: More Non-Competition Restrictions and Obligations
In October 2023, California’s Governor signed Assembly Bill (AB) 1076 making it unlawful to impose non-compete clauses on employees. The non-compete statute now makes clear that, when California law applies, almost all non-compete and restrictive covenant clauses with employees are unenforceable. AB 1076 also imposes notice requirements upon employers through a specific Code section.
Under Business & Professions Code §16600.1, employers must send notices to the last known mailing and email address of every current and former employee who worked under a non-compete after January 1, 2022, informing them that any non-compete to which the employee was bound is now void.
The changes to the law took effect on January 1, 2024, but employers have until February 14, 2024, to provide the required notices under the statute.
Employers with California employees should contact their attorney to review and revise their current template restrictive covenant agreements to remove non-compete clauses. Employers may also need to work with their attorneys to draft and send notices to all employees covered by California law by February 14, 2024.